Mr. President, I rise today in strong support of the Marketplace Fairness Act. I would like to thank Chairman Rockefeller. I'd like to thank the two major sponsors of this bill, Senator Durbin and Senator Enzi, who have been working on this bill for years. Senator Heitkamp for her long-time knowledge and leadership on this bill, as well as Senator Alexander.
I'm proud to be a cosponsor of this important legislation, and it has been a very, very important thing, for years, for businesses in Minnesota, both big and small and across the country, giving them the certainty they need. That's what this bill will do so they can succeed and grow. I'm encouraged to see the Senate coming together in a bipartisan way to create a level playing field for our businesses on ‘Main Street’ to compete.
That's all they want to do. They just want an even playing field to compete. The bipartisan support for the Marketplace Fairness Act is a reminder that when we put politics aside, that we can get things done. Something you know very, very much about, the presiding officer from the state of West Virginia.
During the budget debate, 75 senators came together and we succeeded in passing an amendment that I cosponsored to the budget resolution that helped outline the broad support for a very simple idea - that all businesses need to play by the simple set of rules.
When I go around my own state, as I know Chairman Rockefeller knows in his, I hear from small locally owned retailers and the competitive issues that are raised all the time. We have small businesses. This gives you a sense of what we're talking about.
Places like the Ufda Gift Shop in Red wing, Minnesota. I hope you will all visit there. I have been there and done Christmas shopping there. Mary's Morsels, which is a bakery in Eveleth, Minnesota, on the Iron Range, where my dad grew up. Sleepy Eye Floral. I suggest all of you go to Sleepy Eye, Minnesota, at some point in your life. You can then go and buy some flowers at Sleepy Eye Floral and you will find big support for this legislation for the Marketplace Fairness Act.
In my time in the U.S. Senate, I have been committed to a competitive agenda that promotes long-term economic growth. Part of that agenda includes not only bringing our debt down in a balanced way, promoting exports, making sure that our work force is trained for the jobs of today, but it also means an even playing field to make sure that all businesses can compete.
That's what America has been built on. I know that our businesses in Minnesota want that level playing field and it's time we give it to them, and that is exactly what this bill does. It allows brick-and-mortar retailers the ability to compete against out-of-state internet retailers.
States are currently unable to require out-of-state or online only retailers to collect sales tax and it puts local ‘mom and pop’ shops at a significant disadvantage. Not only that, but this loophole -- by the way, this is not about adding a tax. That's why we have such strong bipartisan support. It is only about allowing those taxes to be collected. Something most people support.
I have to tell you that because these taxes aren't being collected, it creates a loophole that's literally draining billions of dollars in lost revenue from state and local government. A time when they need it for cops, when they need it for firefighters, and when they need it for our schools. 23 billion dollars last year alone, Mr. President, was lost because these laws weren't being enforced in an even way.
My state lost about $394 million in 2011 from out-of-state sales taxes that are legally due, but not collected. This lost revenue translates into over seven percent of Minnesota's general sales tax liability in 2011. In our state, local brick-and-mortar retailers assess sales tax at a rate of 6.875 percent, while their online competitors typically assess no sales tax. That's simply not right. When this happens, city and state governments either have to find revenue from other sources, such as raising taxes, or they must cut critical services.
Let's also be clear about what the legislation, which Senator Heitkamp so intelligently pointed out. Let's be clear about what the legislation does and doesn't do. It doesn't create new taxes or increase existing taxes. It simply gives states the ability to enforce their own sales and use tax laws, which reduces the need to raise taxes. It also relieves customers of the legal obligation to report to state tax departments the sales taxes that they owe.
One of the long-standing principles of tax fairness is that taxpayers who engage in similar economic transactions should face the same tax consequences. Today, that is simply not the case. Minnesota is home to these thriving small businesses but also too many large businesses that are in the retail business, like Target and Best Buy.
I have seen with my own eyes people go into Best Buy, spend a half an hour with a very eager salesperson who is helping them in any way, look at dozens of televisions, and then go back outside the store and buy it on the internet. That's not how things should work. We have to have fairness. That's why this bill is called ‘Marketplace Fairness’.
This bill has such strong support from business; such strong support in this chamber. I'm very excited about what's going on. We have been having this debate for over 10 years now. It's one of the first things I heard about when I got to the Senate six years ago. It's been a long time to get this done. Thank you, Mr. President. I yield the floor.